Anant Ambani’s appointment in Reliance Board may get stuck: Proxy-firm told shareholders – vote against Anant, he has no experience.
Institutional Shareholder Services (ISS) has asked shareholders to vote against the proposal to appoint Anant Ambani, younger son of billionaire Mukesh Ambani, as director of Reliance Industries (RIL) on the board. This may affect Ambani’s succession planning. ISS is an international proxy advisory firm.
Questions on Anant’s appointment to Reliance’s board
According to Bloomberg’s report, ISS said in a note on October 12 that a vote against this proposal is necessary, because 28-year-old Anant Ambani has limited leadership/board experience of about 6 years. Raises concerns and questions over his contribution to the board.
However, ISS has supported the appointment of Mukesh Ambani’s elder son Akash and daughter Isha Ambani to the board of Reliance. Akash and Isha both are 31 years old. Shareholders have to vote by October 26 on the proposal of appointing Akash, Anant and Isha to the board.
IIAS also raised questions on Anant’s appointment to the board.
Before ISS, Mumbai-based Institutional Investors Advisory Services (IIAS) had also raised similar questions on Anant Ambani’s appointment to the board. IIAS had said that Anant Ambani’s appointment to the Reliance Board at the age of 28 is not in accordance with our voting guidelines. IIAS has also supported the proposal of selecting Akash and Isha.
Reliance replied to the questions of the firms.
On the questions of appointment, Reliance said that Anant has both the experience and maturity to add value in the board meetings. Anant has been looking after the business of the group for many years and is also getting senior leadership experience, which has groomed him. He is able to contribute to board meetings.
Glass Lewis supports Anant’s appointment
Another international proxy firm Glass Lewis has supported Anant’s appointment. The company’s Asia-Pacific Research Director Deki Vindarto said that Akash and Isha are only three years older than Anant, but the professional experience of all three is almost equal.
Foreign and local institutions have 40% stake in Reliance.
Founders have more than 41% stake in the company. Whereas foreign and local institutions have 40% stake. These investors vote on the recommendations of proxy firms. Mukesh Ambani was included in the board of Reliance in 1977, when he was 20 years old.
The company sought approval from the shareholders for the appointment of the three.
In September, the company had sought approval from the shareholders for the appointment of the three on its board. In this proposal, the company had also given information that Akash, Isha and Anant will not take salary as directors of Reliance. They will be paid only fees for attending board and committee meetings and commission on the firm’s profits.
Earlier, Mukesh Ambani had announced in the company’s annual shareholders meeting in August that his three children would be included in the board of Reliance. He also said that he will remain the chairman and CEO of the company for the next five years, focusing on developing and empowering the ‘next generation’ leaders.
Like Nita Ambani, the terms
of appointment of all three are the same on the basis of which Mukesh Ambani’s wife Nita was appointed to the company board in 2014. Like 2021-22, Neeta had taken a sitting fee of Rs 6 lakh and a commission of Rs 2 crore in the financial year 2022-23. In 2020-21, he received sitting fee of Rs 8 lakh and commission of Rs 1.65 crore.
